World View & Market Commentary. Forest first; Trees second. Focused on Real & Knowable facts that filter through the "experts" fluff and media hyperbole. Where we've been, what the future may hold and developing a better way forward.

Saturday, November 28, 2009

UPDATE: VICTORY HAS BEEN ACHIEVED FOR NOW! THANK YOU FOR ALL YOUR HELP! The Prison has agreed to back down, please see Martin Armstrong – WE WON!

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Frankly, I cannot believe that I have to write the words that follow. I just learned that Martin Armstrong is being moved, possibly as early as Monday, from his current holding facility to a much higher security facility, MDC Brooklyn, which is similar to the facility he was in when he was in solitary confinement and where he was beaten nearly to death! This goes against the prison’s own rules and is against the law as he has two Habeas cases open in the Supreme Court.

Why would this be happening now with a little more than a year before he is eligible for parole? I and others contend that it is because of his recent writing activity and because of his recent interview with the New Yorker Magazine (The New Yorker - "The Secret Cycle…"), and also because there are now several media outlets requesting to do interviews with him – the prison simply does not want, for whatever reason, the access that we have been enjoying lately to continue. I spoke directly to Martin’s younger sister, Nancy, and this is her opinion as well. She is very upset over this move as she, “fears that he may not make it out.” She claims that Martin is very much afraid of this move and for good reason…

First let’s review the facts… whatever you believe about his innocence or guilt or innocence of any crime, the facts are that he was never put on trial for any crime. He was held in contempt of court for not producing what the judge ordered him to produce, something which he claims he didn’t have. He was placed in MDC Manhattan and was basically TORTURED. According to Nancy, he was locked in solitary confinement for almost the entire duration, suffering days on end and at times was intentionally awaken every hour or so all night long, night after night, in an attempt to get him to sign a confession. He was repeatedly told that he would not get the chance to see his 91 year old mother alive again if he did not sign the confession. This took place off and on for SEVEN YEARS. Then one day a huge convict, “a known homicidal maniac” named George, was locked in his cell with him where he proceeded to beat and strangle him until he thought he was dead. Later, according to Armstrong, a fellow inmate stated that the guards watched the beating and refused to open the door to stop it. He lost most of his teeth, and now, over two years later is still missing them because the prison system only has one dentist for over 5,000 inmates. He suffered a detached retina, broken ribs and other internal injuries that left him in intensive care.

They offered him a plea agreement to TIME SERVED if he would plea guilty and after 7 years, he could take no more and agreed, obviously under heavy duress. However, after pleading guilty, the judge instead of living up to the plea agreement sentenced him to the maximum amount allowable and he is now not scheduled for release until September of 2011, first eligible for parole in March 2011. His current location is at Ft. Dix, New Jersey where he is only 20 minutes from his mother and sister, a relatively safe facility. His sister takes his infirmed mother to visit him once a week, but she will not be able to make the journey into Manhattan. He is now under great stress as he believes he may not survive while inside the new location.

Inside this facility, I am told, he will be basically strip searched with nearly every movement, and he is not granted some of the “privileges” that he currently has access to, thus producing his work will be impaired, if not eliminated all together.

The question is WHY would they break their own rules and the law to move him now?

For a refresher, Habeas Corpus is defined as follows: “Habeas corpus (pronounced /ˌheɪbiːəs ˈkɔrpəs/) (Latin: You (shall) have the body) is a legal action, or writ, through which a person can seek relief from their unlawful detention or that of another person. It protects individuals from harming themselves or from being harmed by the judicial system.”

Below is Federal Bureau of Prisons document number p5100.08 that spells out exactly what must be considered before moving an inmate. Preceding the document is the pertinent paragraph for those who have active Habeas cases. This paragraph recites the LAW as it applies here as Armstrong has not one, but TWO Habeas cases at the Supreme Court in his current jurisdiction:

Below is the actual law (Frap 23) regarding Habeus and the proceedures to be followed when transferring prisoners who have pending Habeus cases:

Additionally, below you will find the Rules of the Supreme Court. Rule 36 on page 47 states the following:

How nice of a facility is MDC Brooklyn, the facility they are planning on moving him to? Well, here are three separate articles alleging various forms of abuse:

Eleven federal jail guards, including a captain and three lieutenants, were charged yesterday with beating two inmates at the Metropolitan Detention Center in Brooklyn, one so badly, officials said, that a pool of his blood and bits of his hair lay on the floor of his cell when it was over.

The guards were also charged with covering up the beatings by filing false reports that blamed the inmates for having instigated the attacks. Eight of them pleaded not guilty yesterday at arraignments in Federal District Court in Brooklyn and were released on bail. The three others are expected to be arraigned in federal court within days.

Prosecutors say in November 2002, Lopresti, Rosebery, Tassio, Peterson and Santana participated in a planned attack on a former MDC inmate, identified in the indictment as John Doe #1, in his cell, and the subsequent cover-up. The attack, led by Lopresti, was carried out in retaliation for the inmate having "disrespected" Lopresti earlier that day by failing to heed Lopresti's request to remove a t-shirt that was wrapped around the inmate's head.

During the attack, the officers repeatedly struck, kicked and beat the inmate, leaving a pool of blood and clumps of the inmate's dreadlocks on the floor of the cell. The officers allegedly sought to disguise the retaliatory attack by tying the inmate's bedsheet into a noose and wrapping it around the bars of the cell's window in order to make it appear that the inmate had tried to hang himself. In written reports about the incident, the officers falsely claimed that the inmate had become combative as they attempted to prevent the inmate from committing suicide, thereby prompting the officers' use of force against him.

During the subsequent investigation conducted by the Department of Justice's Office of the Inspector General, Tassio initially admitted that her written report was false and that the inmate had not tried to kill himself, but later recanted and re-asserted the charged false claim about the attempted suicide.

…While in jail, he was denied dental care and was unable to eat his food properly [Sound like what is happening to Armstrong?]. He was also diabetic, but was deprived of his medication for as long as three months. His blood sugar was high and he complained that his feet were numb. When he went on a seven-day hunger strike, vowing to continue until he died, he was thrown into solitary confinement and had his glasses taken away so he could not see.

The Brooklyn MDC is known to be particularly brutal. The New York Times and the Daily News carried reports earlier this year that detainees were slammed against the wall and had their arms, wrists, and fingers twisted and bent. Another common practice was to step on the detainees’ leg restraints. At the same time, the detainees were threatened and verbally abused. A report by the Office of the Inspector General of the Department of Justice wrote, “According to detainees, the verbal abuse included taunts such as ‘Bin Laden Junior’ or threats such as ‘you’re going to die here.’ ” Some Muslim detainees were denied any visitation rights for up to 90 days for praying.

Some of the abuses were caught on the jail’s surveillance tapes. The Daily News reported, “Inspector General Glenn Fine, whose staff reviewed 380 MDC videotapes, reported in 2003 that ‘These tapes substantiated many of the detainees’ allegations.’ Furthermore, the officers were not just a few bad apples but ‘a significant percentage of those who had regular contact with the detainees,’ Fine wrote last March.”

Think Armstrong will be able to produce those papers in that environment? His thoughts will not be on our economy, the rule of law, what’s happening to gold, or any such thinking… instead he will be focusing on SURVIVAL.

Did you know this type of thing was happening in America TODAY? Or, do we ignore it, blowing it off as the guilty getting their “just rewards?” I ask you, is this Armstrong’s “just rewards?”

- Last paragraph of "Looking Behind the Curtain - The Real Conspiracy…" April 9, 2009 Paper by Martin Armstong

Keep in mind that at no time in the history of mankind has a country held in prison a larger percentage of the population than we do now (not even South Africa during Apartheid), nor has their been a higher rate of conviction among those put on trial by our government, one of the very statistics that typically elevates the closer to the end of the current “empire” a nation is (this is because it shows that balance has been lost and that the government is exercising greater control):

There are people who are seeking new legal help for Martin on this issue as the law is clearly not being followed. Below is a plea for help from supporters of Armstrong and his family:

They are requesting that everyone please PHONE, EMAIL, AND FAX the following people to remind them of their responsibility to uphold the law and to protect Armstrong. The two primary people to contact here is his current Warden, Donna Zikefoose, who has, without consulting the judge as required by law, signed the order to move him. The other important contact is Traci Billingsley as she is the Public Information Officer of the entire Bureau of Prisons. This is the type of publicity I am sure they do not like.

We have now included contact information for the Judges as well. We appreciate taking the time to work on BOTH angles to increase the odds that we stop their planned movement.

Please do what you can. Send faxes, send emails, and call their phones on Monday and ask to talk to them! Ask them why the rule of law is not being followed in Martin’s case! Also please provide a link to this post on other blogs you follow, thank you.

ATTENTION: An update on Armstrong's situation with new contact information and strategy are included. I really appreciate everyone who puts in a few minutes to do this, it's very important for Martin! LINK: Armstrong Update!

Please consider the following poem:

First they came for the communists, and I did not speak out—because I was not a communist;Then they came for the trade unionists, and I did not speak out—because I was not a trade unionist;Then they came for the Jews, and I did not speak out—because I was not a Jew;Then they came for me—and there was no one left to speak out for me.

I do not agree with all the facts and conclusions of this video, but am playing it to simply show what others are thinking. Note that no one in this video correctly identifies the source of the inflation they are claiming to see. You must look to how our monetary system works before you can begin to correctly identify the problem (interest bearing debt backed money whose quantity is not in control), and to find solutions that work to keep the quantity of money under control for the long haul yet is flexible enough to allow for REAL economic growth while keeping PRICE inflation steady over time. Such a system IS possible.

The Dollar Bubble (30 minutes):

Here is Max Keiser's latest on the Dubai debt crisis along with his take on the dollar.

Friday, November 27, 2009

Welcome to Black Friday… But you have to wonder, is it Black Friday due to after Thanksgiving shopping or is it due to the stock market? Hmmm...

Well, from their close on Wednesday, the DOW plunged more than 300 points yesterday and since midnight have been climbing back out of the hole, now down about 190 points. Here’s a chart showing DOW futures on the left, and S&P futures on the right:

The dollar initially fell Wednesday evening to a new low and just when it appeared to be collapsing, magically the Dubai story broke and up the dollar jumped, back over the key 75 level and right into the upper downtrend line where it ran into resistance and turned down. The following chart is the daily dollar futures on the left and 30 minute chart on the right:

Bonds moved around some, but are basically back where they closed on Wednesday. Oil PLUMMETED, going from $78 to a little over $72 in very short order. It is now approximately $74. That move did cause it to break below the bottom trend line of its down channel… it tried to regain, but has failed to so far. Gold collapsed and fell all the way to the bottom of its rising expanding wedge, then bounced. It is currently at about $1,162, $32 below Wednesday’s close.

The news has now pegged this to the Dubai default story. However, there is much more going on besides that. There’s bank problems in Greece, there are debt and confidence problems in Japan, and there are derivative and counterparty issues involved with Dubai too.

I’m not sure how this will play out. There are going to be HUGE gaps in the charts on the open. Markets abhor gaps, they get filled eventually. If I were a member of the Pollyanna club, I would think that the selling was an overreaction and a buying opportunity. If I had an ounce of common sense, I would be long gone knowing that those who panic first, panic best. Or, I could be calm, cool, and collected, completely out of the fray. A spectator laughing at the spectacle of desperate clowns and market manipulators, knowing full well that with a debt saturated world that Black Swan events such as this would eventually appear. Gee, who could have known?

So today the overworked and overstressed “gatherers” will be out gathering in a marketing induced frenzy, while the “hunters” sit on the sofa drinking beer and watching their favorite Roman gladiator do battle in a taxpayer funded Coliseum, blissfully unaware that their modern day Rome is crumbling down around them. Oh yeah, there’s an uneasy feeling in the air, they just can’t put their finger on it.

Technically, we fell 50% of the gain of the last wave, erasing the past two weeks of market gains, just like that, while the markets were closed and the sheeple could not respond. I don’t know, but I’m thinking the sheeple who have yet to learn their lessons about our modern state of the markets are about to be taught another lesson. I have been warning that the background to the markets was not right. We had the very short end of the curve go negative and we had a backdrop of a declining dollar, a very dangerous situation. The market always knows, the stress leaks out in various places. This stress is caused by debt! Our masters are attempting to defy gravity, but the rule of debt is a natural law that cannot be defied. The rule is that all debts get repaid with interest in one way or the other. This stress would be the other.

All the criminals will be back to work on Monday, much will depend on how they plan to take your money. Profiting from the market at this point is going to be very tricky. I still believe that the selling will overwhelm them at some point and it could be ugly when it happens. That would argue for having some short exposure, and you can see that unless you are in front of it, you are likely to miss the beginning. But just how dangerous has front running been? VERY! This is why I’m still being patient waiting for the trendlines to break and for the E.W. count to be in a favorable position. This market has a long way to fall to get to reality, so there’s no need to get caught in the game too early.

And how about that Fibonacci spiral info? It’s now 3 for 4 dates this year from my perspective. The 4th date is December 10th. Pretty sure I’m going to have a position going in front of that timeframe. But in the mean time, it’s Black Friday, one way or the other – enjoy the show, the markets close early at 1:00 Eastern:

Thursday, November 26, 2009

This is exactly how the central bankers are now ACTIVELY ENGAGED IN THEIR PLAN. No, they are not going to get on the world stage and make the following announcement, “Ah hem…. We, the Central Bankers of the planet Earth, are hereby enacting our plan to control the people, nations, and natural resources of the planet, so that WE can CONTROL the globe and PROFIT from every transaction!”

No, no, that press conference won’t be held until AFTER it is complete. It’s now in progress, here’s how it works… start by infesting the globe with money that can only come into being when it’s backed by debt. Then add in a massive heaping of skanky derivatives and shaky debts, stir up the pot and begin creating one crisis after the other. Then step in like this:

Nov. 25 (Bloomberg) -- The International Monetary Fund said it will have access to a credit line of up to $600 billion to make loans during financial crises after contributing countries agreed to fold commitments into one pool.

The agreement, yet to be approved by the IMF board, adds as many as 13 members from the current 26 to the so-called New Arrangements to Borrow, including emerging nations China, Russia, Brazil and India, the IMF said in an e-mailed statement.

The decision “marks an important moment for multilateralism and the fund, which will help the IMF’s effectiveness in its response to crises,” Managing Director Dominique Strauss-Kahn said in yesterday’s statement.

The deal goes beyond a pledge by leaders of the Group of 20 nations to contribute up to $500 billion to a credit arrangement that’s currently worth $54 billion, the IMF said. The worst financial crisis since the Great Depression prompted more nations to seek aid from the fund, created after World War II to help ensure the stability of the global monetary system.

The agreement, which merges existing commitments into one facility, makes it easier for the IMF to tap into its supplemental resources. The credit line will be “an effective tool of crisis management as a backstop for the international monetary system,” the IMF statement said.

While a general agreement on the NAB was reached at the G- 20 meeting in Pittsburgh in September, talks on the specifics stalled over divisions between some emerging and developed nations over voting rights relating to the credit facility.

Borrowed From MembersThe IMF has estimated that its current credit line was insufficient when the financial crisis boosted demand for loans. It then started to borrow from individual members, such as Japan, to continue lending to countries in difficulty.

To ensure the institution would continue shoring up economies around the world, G-20 leaders in April pledged to add $500 billion to the IMF’s resources.

Some of these contributions were bilateral loans, while China agreed to participate by buying the first IMF notes. Some countries, like the U.S., made theirs directly to the NAB.

When the new credit-line agreement is activated, all the bilateral loans will fall into it, Andrew Tweedie, who heads the IMF Finance Department, said in a Nov. 20 interview. It won’t come into effect before next year, he said.

So, the IMF who comprise the world’s central bankers go the individual central bankers and get money… of course this is just for show and to confuse the world… they could just as easily just create their own IMF money, and I’m sure will, but instead they pretend that they are “borrowing” money from countries around the world. Well, were did that money come from? The same central bankers!

March 25 (Bloomberg) -- Serbia and the International Monetary Fund agreed on a 3 billion-euro ($4.1 billion) bailout to help the country repair the damage to its economy by the global financial crisis, Economy Minister Mladjan Dinkic said.

The accord will last two years, he told reporters in Belgrade today.

Last year, Serbia opened a $516 million credit line with the IMF, joining countries including Hungary, Ukraine and Latvia in seeking outside help to cope with the effects of the crisis. Like other emerging markets, Serbia is grappling with a lack of credit and a plunging currency as the economy contracts for the first time in a decade.

Serbia is also hoping for additional commercial loans from the World Bank and the European Union that will be negotiated on March 27 in Vienna. Serbia already has received a $600 million aid package from the World Bank.

On March 24 central bank Governor Radovan Jelasic said Serbia’s economy may contract 2 percent this year. There is a “downside risk” to this forecast because the government doesn’t have enough funds to spur the economy through spending, he added.

Finance Ministry spokeswoman Kristina Radovic said on March 17 that Serbia didn’t draw any funds from the original credit signed in November.

BINGO! Ding, Ding… Johnny, we have a sucker on the line! And in this way Serbia now must conform to the conditions of the loan or they will be cut off. What did the central bankers do to “earn” this money? What and who gave them the right to mint money on the global stage and to indebt entire nations? I think you know the answer to that… they gave themselves the power to do so, no one would stop them as the politicians and the judges are bought off along the way.

The cost of protecting government notes from Abu Dhabi to Bahrain rose, extending the steepest increase since February as Dubai World, with $59 billion of liabilities, sought a “standstill” agreement from creditors. Its debt includes $3.52 billion of bonds due Dec. 14 from property unit Nakheel PJSC. Dubai credit-default swaps climbed 90 basis points to 530 after yesterday increasing the most since they began trading in January, CMA Datavision prices showed.

“There is nothing investors dislike more than this kind of event,” said Norval Loftus, the head of convertible bonds and Islamic debt at Matrix Group Ltd. in London, which manages $2.5 billion of assets including Dubai credits. “The worst-case scenario will, of course, be involuntary restructuring on the Nakheel security that brings into question the entire nature of the sovereign support for various borrowers in the region.”

Dubai World’s assets range from stakes in Las Vegas casino company MGM Mirage to London-traded bank Standard Chartered Plc and luxury retailer Barneys New York through asset-management firm Istithmar PJSC. The Dubai government’s attempt to reschedule debt triggered declines in stocks worldwide that had been rebounding from the worst financial crisis since the Great Depression.

‘Debt Burden’“We understand the concerns of the market and the creditors in particular,” said Sheikh Ahmed Bin Saeed Al- Maktoum, who chairs the Supreme Fiscal Committee in charge of apportioning financial support to ailing companies, in the first statement to come out of the Dubai government since the announcement about debt rescheduling. “However, we have had to intervene because of the need to take decisive action to address its particular debt burden.”

The MSCI Emerging Markets Index of stocks had the biggest decline in four weeks, falling 2.2 percent, led by Russia and China. Europe’s Dow Jones Stoxx 600 Index lost 3.3 percent in London, the biggest decline since April 20. South Africa’s rand and the Turkish lira weakened 2.1 percent against the dollar. Hungary’s forint lost 1.7 percent per euro. Credit-default swaps on Russia increased to 205 basis points from 192.The MSCI World Index of 23 developed markets has risen 26 percent this year after banks worldwide recorded more than $1.7 trillion in writedowns and losses and governments committed about $12 trillion to shore up economies.

Dubai, ruled by Sheikh Mohammed Bin Rashid Al Maktoum, borrowed $80 billion in a four-year construction boom to transform the economy into a regional tourism and financial hub. The emirate suffered the world’s steepest property slump in the global recession, with home prices dropping 50 percent from their 2008 peak, according to Deutsche Bank AG.

Moody’s Investors Service and Standard & Poor’s cut the ratings on Dubai state companies yesterday, saying they may consider Dubai World’s plan to delay debt payments a default.

‘Further Defaults’“Dubai is the most indicative of the huge global liquidity boom and now in the aftermath there will be further defaults to come in emerging markets and globally,” said Nick Chamie, head of emerging-market research at Toronto-based RBC Capital Markets.

Saudi Arabia default swaps climbed the most since February, adding 18 basis points to 108. The British Bankers’ Association asked the U.K. government to intervene with Saudi authorities over debts of at least $20 billion owed to as many as 100 banks by Saad Group and Ahmad Hamad Algosaibi & Brothers Co., two family holding companies based in the oil city of Al-Khobar, according to a letter dated Nov. 20.

Default swaps on Dubai World unit DP World Ltd., the Middle East’s biggest port operator, jumped by a record 181 basis points to 540.5 yesterday and were priced another 72 basis points higher today at 612, according to CMA data.

Manmade islands and gleaming new cities in the middle of the desert all devoid of people and real commerce. Of course the people who provided the financing deserve to lose their money and this will ripple around the globe, just one of several problems interrupting our markets (DOW futures are down more than 200 points this Thanksgiving even though the markets are closed). Amazing how news like this occurs when the U.S. markets are closed.

The people of the world need to wake up. Their futures and their natural resources are being robbed. There is a much, much better way, details coming soon. Meanwhile the Central bankers are already enacting their plan as they sing to Serbia, “Got you where I want you…”

While I’m sincere in my warm wishes, I want everyone to keep in mind what the world faces and how we are all being played.

Beginning about the time the markets closed yesterday and into the evening and now morning, the currency markets have been going haywire. Large moves, first down in the dollar, and now up are occurring. The Japanese Yen is strengthening rapidly and broke through key support. In the Middle East, Dubai in the U.A.E. (one of the world’s richest oil nations), is looking like they are defaulting on some of the debt behind their bright and new people-less cities. Greece has banks that are in trouble, while at the same time Japan is finally having a confidence crisis over their debt.

And here in the good ol’ U.S.A., our politicians blow smoke up our skirts about the economy while the banksters rob us blind and take over control of what used to be our free markets. While the markets are open, they gun their positions and when the markets are closed to normal people like you, this is the type of action that occurs in the futures:

Yes, we have a lot to be thankful for. We also have a lot of cleaning up to do. Enjoy the holiday, but keep focused on what’s coming and what we are going to do about it. Everyone has a role to play, your help and support is going to be needed. In concert with others I have developed a plan that I think is going to work and is going to get traction as it will get the people behind us, it will get the states behind us, and it should even get most of the banks behind us (okay, maybe not the central banks, lol).

IT'S BEGINNING TO LOOK A LOT MORE RISKLESS (or maybe NOT!)

PS - By the looks of the poll results on gold backing, I have quite a bit of education still to do. Please buy the film and learn about the history of the gold standard. Wanting control over the QUANTITY of money is indeed nobel, but gold is not the way to do it:

Wednesday, November 25, 2009

Equity futures are up this morning while the dollar is breaking below support and making new lows for the year. DOW and S&P overnight action is below:

Bonds are down slightly while the Dollar, which has been flirting with Disaster, has broken beneath recent support and hit an overnight low of 74.40.

Gold, of course is going ballistic and is now pushing the $1,200 mark with an overnight high of $1,184 an ounce. Oil is up only slightly after breaking below support and triggering a new bearish Point & Figure target of $71 a barrel:

The MBA purchase applications “data” was first out this morning showing a whopping 9.6% advance over the week prior! This is amazing, especially in light of the recent many large negative prints in the past 6 weeks or so. Here’s what Econoday has to say about it:

HighlightsTwo prior weeks of big declines in the purchase index raised talk that however good October may have been good for home sales, November was likely to mark a reversal. But not so fast! The purchase index surged 9.6 percent in the Nov. 20 week, biting into mid single digit and low double digit declines in the prior two weeks (note MBA said the prior week was revised slightly lower but offered no further details). The sequence suggests that let down with the end of first-time buyer credits was limited to the beginning of November. Refinancing applications fell 9.5 percent in the week but still make up more than 70 percent of all applications, a reflection of extremely low mortgage rates including an average 4.82 percent for 30-year fixed loans.

So, the MBA revised the prior week DOWN, thus making this week look like a larger increase than had the revision not happened. But we can’t see the raw data, much less how it’s compiled, so we really don’t know ANYTHING about what’s happening besides the fact that there is no transparency and that we are being manipulated right along with the presentation of the data. Other sites, by the way, that attempt to track this data will be thrown off by revisions… it is completely IMPOSSIBLE to track when all that is reported are percentage changes and revisions are made without telling how large they are. This is the type of stuff that will bring down confidence in the entire system.

Next up is Durable Goods orders. It was expected to produce a month over month POSITIVE .5% change, instead it was a NEGATIVE .6% change. The year over year figures are coming up on easier comparables. Overall, this report is worse than expected:

HighlightsThe outlook for manufacturing cooled a bit in October. New orders for durable goods in October fell 0.6 percent, after a revised 2.0 percent rebound in September. The drop in October was well below the market forecast for a 0.5 percent boost. Excluding the transportation component, new durables orders fell 1.3 percent, following a 1.8 percent jump in September.

The drop in new orders was led by machinery which fell a monthly 8.0 percent, followed by a 2.1 percent decrease in computers & electronics. Also declining were communications equipment and "other" durables. Partially offsetting were gains in primary metals, fabricated metals, electrical equipment, and transportation.

New orders for capital equipment continued to rebound from a drop in August. New orders for nondefense capital goods rose 1.2 percent in October after an increase of 3.2 percent the month before. These orders had dropped 7.8 percent in August.

Year-on-year, overall new orders for durable goods improved to minus 11.9 percent in October from minus 18.8 percent in September. Excluding transportation, new durables orders rose to minus 11.3 percent from down 16.3 percent the previous month.

Today's durables orders report indicate that recovery in manufacturing is not a smooth one. Of course, new durables orders are one of the most volatile market moving indicators published by the government and no one month makes a trend. But at face value, the recovery in manufacturing cooled just a little in October. Equities will not like the orders numbers but jobless claims dropped more than expected and some see the personal income report as healthy (though the details suggest not so much).

Keep in mind that just because the yearly line is pointing up does NOT mean that it is actually rising, just that yoy comparisons are getting better… this yoy number is still significantly negative which means that the economy is still getting worse than it at this time last year, at least in this regard.

Next up is Personal Income and Outlays… This came in almost exactly as expected with wages basically flat but core inflation readings firming slightly:

HighlightsPersonal income was mildly positive in October and spending was up as auto sales rebounded. Personal income in October edged up 0.2 percent, following a revised 0.2 percent rise in September. October's gain matched the consensus forecast. The important wages and salaries component, however, was flat after a 0.1 percent dip in September, indicating that consumer spending power is not improving.

We are seeing probably the final impact of cash-for-clunkers on personal spending in October. Motor vehicle sales fell sharply in September with the ending of incentives in August. In October, auto sales rebounded and returned to normal-at least for the recovery trend. Personal consumption expenditures jumped 0.7 percent after a 0.6 percent drop in September. The market had forecast a 0.5 percent boost in PCEs. The boost in October was led by durables, which rebounded 2.0 percent after an 8.8 percent plunge in September. In the latest month, nondurables rose 0.2 percent while services advanced 0.3 percent.

Inflation firmed in October. Headline PCE price inflation rose to 0.3 percent from a 0.1 percent rise in September. Core PCE inflation edged up to 0.2 percent in October from 0.1 percent the month before. The consensus had expected a 0.2 percent core gain for the latest month.

Year on year, personal income growth for October came in at minus 1.0 percent, improved from minus 1.6 percent in September. Year-ago headline PCE inflation rose to plus 0.2 percent from minus 0.6 percent in September. Year-ago core PCE inflation firmed to up 1.4 percent in October from up 1.3 percent the month before.

On initial blush, the October personal income report looks moderately good. But after taking into account weakness in wages and salaries and that the spending gain was a partial rebound from clunkers, it is indicative of a soft consumer sector. Markets have much to sort through this morning. Some will focus on headline numbers for personal income and see good news. A nice drop in jobless claims this morning may add to that temptation. On the other hand, durables orders were weak. Most likely, the good news on jobless claims will likely tip the balance, boosting equities and firming interest rates.

Weekly jobless claims fell below the 500,000 mark for the first time in a year, with a headline number of “only” 466,000 which was below the 495k consensus. This produced a euphoric spike in the futures:

HighlightsImprovement in initial claims is picking up steam in what points to lower payroll losses for November's employment report. First time claims fell 35,000 in the Nov. 21 week to 466,000 (prior week revised 4,000 lower). The four-week average also broke below 500,000, down 16,5000 to 496,500. Continuing claims are also falling, down 190,000 to 5.423 million in data for the Nov. 14 week, but here the change also reflects the expiration of benefits. Those receiving extended benefits fell 34,600 to 539,500. Continuing claims may be clouded but initial claims offer perhaps more reason for optimism than any other piece of economic data.

What’s there to say? The economy needs to produce 150,000 jobs a month to break even and we’re still stacking on newly unemployed workers while others simply run out of benefits. Meanwhile the politicians are clueless that the more debt they inject into the system, the higher unemployment goes. Debt leads to unemployment, they are tied together once debt saturation occurs, and it’s here. Having a money system backed by debt, then only worsens the situation when one attempts to spend their way out. It is quite literally impossible to do so.

The spike up may be just the thing to top off the current up move. The VIX diverged bearishly yesterday, again showing signs of severe complacency to me. This is setting up a very dangerous situation with the dollar falling in the background. This trend is simply not sustainable and it’s going to end in tears. Funny, and as I type those words, the entire spike caused by this report melted away.

Consumer Sentiment and New Home sales come out at 10 Eastern, the petroleum report at 10:30.

McHugh believes we are making a small rising wedge which is a terminal pattern. If so, this may be the pattern that ends the final wave up of B up. This pattern could have another zig-zag or two left in it.

The move below support in the dollar is the real news of the day. The next support area is down around 71/72. Breaking support was largely caused by the British GDP report coming in stronger than expected with a -.3% reading in their 3rd quarter. Those who think that the U.S. can artificially keep rates at zero forever while monetizing just don’t realize how international capital flows work. We will be punished, and the government’s attempts to keep everything under control will fail in time.

So, we are now right on the 1,107 SPX pivot point. 1,111/ 1,113 is rejecting advances so far. A run up to the 1,121 area would be the next stop, then comes the 1,133 pivot. If we break below 1,107, support will be 1,101, then the 1,091 pivot.

We are putting in a top, that much I know. A break below support in the dollar might be exactly what’s needed to suck in the last of the dollar short people to make a reversal possible. If the dollar continues down, I am going to get REALLY nervous, as in that’s the stuff where crashes are eventually born. Those thinking the dollar rising will make a crash haven’t seen anything compared to the dollar going down hard in the background. The best outcome from here is that the dollar goes up, equities descend. The worst possible outcome will be found by further devaluing the dollar. That, my friends, is what is called, “Flirtin’ with Disaster!”

Tuesday, November 24, 2009

Equity futures are roughly flat to up a little this morning after being lower, then higher:

The dollar swung higher and then fell back to flat overnight, collapsing back down quickly, showing its propensity to return to the 75 level. There’s a battle going on here, and my saying is that the longer something keeps knocking on the door, the more likely it is to break through… but it cannot and will not sit at this level forever, the break will be interesting. Break up, equities will go down. Break down, most people believe equities will moonshot, and that may be true initially, but the dollar breaking down WILL eventually tank equities, there is no fooling mother nature, no way to get around paying our debts, they must be cleared. Bonds are higher, and if you’re looking for a clue as to equity direction for the day, that is probably it. Oil is down slightly, gold is up a little more, $1,169.

Yesterday was the 10th Monday ramp job out of the past 12 weeks. I must have read four different people talking about that, look for future ramp jobs to come on, oh, Friday. No, wait, most of the Goldman boys are gone that day spending their bonuses, so we better schedule that for Wednesdays.

Both Robert Prechter and McHugh pointed out the time and price relationships in play at this juncture; the B wave rally has now taken exactly half the time of the A wave descent, and it has retraced half the plunge, a very important confluence of price/time. Thus Prechter said, once again, that he believes the top was just put in. McHugh is saying it’s important, but there is still the EW possibility of higher.

The short term stochastics are obviously overbought, there are new short term bearish divergences on top of the historic much larger ones.

The absolutely unreliable ICSC showed store sales were flat week over week but rose 3.3% yoy on much easier comparisons. That’s interesting because sales tax collections are down roughly 8%. Which is correct? Well, the sales tax collections, of course as they are not manipulated. The ICSC suffers the same flaws as the indices with substitution bias among other inaccuracies. The Redbook likewise showed a 2.8% yoy increase against easier comparisons, again, a flawed report, as sales tax data is also yoy, but even it is now measured against this time last year making for a very easy comparison.

The first revision of Q3 GDP lowered the annualized growth rate down from the much ballyhooed 3.5% down to 2.8%, a mere drop in growth rate over that advertised of only20%! Business as usual here during the Great Deception. But of course that was expected… Look, they can, and do, make this number come out any way they want. Did the economy actually grow in the 3rd quarter? NO. It is still shrinking when measured in real money, as it has been ever since the year 2000. At any rate, here’s the propaganda for public consumption:

HighlightsThe recovery is not as strong as hoped, based on the latest Commerce Department revision to third quarter GDP. Economic growth was revised downward to an annualized 2.8 percent from the initial estimate of 3.5 percent. The market consensus had expected a 2.8 percent figure for the new estimate. Nonetheless, the third quarter boost is still the first positive number for GDP since a 1.5 percent gain in the second quarter of 2008. The third quarter increase, however, appears to have ended the recession which faded with a 0.7 percent dip in the second quarter.

The downward revisions were broad based, lowering estimates for PCEs, nonresidential structures, residential investment, business inventories, and net exports. Upward revisions were seen in business equipment & software and in government purchases.

But compared to the second quarter, the improvement in real GDP in the third quarter still reflected upturns in personal consumption, exports, and residential fixed investment and a smaller decrease in nonresidential fixed investment and inventory investment. These were partly offset by rise in imports, a downturn in state and local government spending, and a deceleration in federal government spending.

Turning to inflation, the GDPI price index was nudged down to a 0.5 percent annualized pace and compares to the initial estimate of 0.8 percent and the median forecast of 0.8 percent.

Two items stand out in the report. Final sales were revised down to an annualized 1.9 percent from the initial estimate of 2.5 percent. Demand is not as strong as earlier believed. Second, the downward revision to the price index also indicates softness in demand. These two issues could weigh on equities at open and soften Treasury yields. But there is much more economic news ahead today.

And talk about more fantasy, marked to fantasy corporate “profits” on quarter over quarter comparisons were up and annualized (key word), 71.9%... huh? PLEEEZZZE. How 'bout we annualize the weekly Treasury auctions, shall we? Try $9 trillion a year, so that all the businesses in this country can generate $1 trillion a year in phony profits! Nice try, Econoday, let’s just stick to the year over year percent change that shows a 7.2% drop which is better than the 19.2% plunge in the second quarter. Yes, reported profits were up slightly, but the yoy number is against a much easier comparison, and that time last year the financial industry was still marking somewhat to market, unlike this year where all bets are off and they are back to marking all their assets to whatever gives them the biggest bonuses. Again, no basis in reality, look at tax receipts instead for reality:

HighlightsCorporate profits in the third quarter posted a sharp gain to $1.181 trillion annualized-up from $1.031 trillion the prior quarter. Profits in the third quarter were up an annualized 71.9 percent, following a 24.5 percent boost the prior quarter. Profits are after tax but without inventory valuation and capital consumption adjustments. Corporate profits are still down 7.2 percent on a year-on-year basis, compared to down 19.2 percent in the second quarter.

The Case-Schiller data showed a very slight improvement, the 20 city index rose from 146 to 146.51 in September. Here’s Econoday:

HighlightsHome prices continue to improve according to Case-Shiller data. The report's index for the top 10 cities rose 0.4 percent in September, on the low side of what is a long strong string of improvement. Year-on-year rates continue to improve, now down to single digit contraction at minus 8.5 percent for the 10 index. A look at the quarter-to-quarter rate shows steady improvement, at plus 3.1 percent for both the third and second quarters. Improvement is especially evident in the West and Florida, high flying areas hit hardest by the housing downturn. This report, noted for its vigorous methodology, continues to contrast with price data in the existing home sales report where contraction, though slowing a bit, is still underway. New home sales data for October will be posted tomorrow. Prices in this report did show improvement in September.

Pretty much a yawner. Another report came out and said that 1 in 4 mortgages are now underwater…

NEW YORK (CNNMoney.com) -- In a sign that more foreclosures could be on the horizon, 23% of people with mortgages owe more than their home is worth, according to a report released Tuesday.

Almost 10.7 million U.S. mortgages were "underwater" as of September, said research firm First American CoreLogic.

Another 2.3 million homeowners are within 5% of negative territory, the report said. The two figures combined comprise almost 28% of all residential properties with mortgages.

Negative equity, also called an "underwater" or "upside down" mortgage, has become more common as home values plummet. The report is closely watched because borrowers who are underwater are more likely to be foreclosed.

Of course we know that the option-ARM reset debacle is just now picking up where sub-prime left off. Amazing how many people ignore it.

Consumer Confidence comes out at 10AM...

I’m just waiting for the nut to crack and not getting too worked up about anything at this juncture. Soon the dollar and equities will pick a trend, it’ll probably be real obvious when they do. The E.W. counts say that trend will be up in the dollar and down in equities. If the dollar rolls down further as those in the administration are trying to force, I think the outcome will not be what they expect. They think they can devalue debt away. The problem nature has with that is that when they do, people’s purchasing power goes down, thus they must work more to get the same amount of goods. It all boils down to productive effort. The law of nature states that all debts get repaid with interest in one way or the other… you can fight that law, but guess who wins?

Monday, November 23, 2009

St. Louis Fed President, Jim Bullard, was the replacement for Mr. Poole to head the St. Louis Fed. If you’ve ever wondered why the Fed doesn’t seem to know what’s going on with much of anything, look no further. I can conclusively say that I disagree with almost every utterance from his lips – as in the exact opposite. Someone who obviously hasn’t learned the real lessons of the crisis, he believes that it’s his job to “get credit flowing again.” He has no idea why a “jobless recovery might just be the new standard” because he has not figured out the decelerating effects that debt has on the economy, on the velocity of money, and on unemployment. Despite having a Ph.D in economics, and being a Fed research writer (have you read many of those reports?), I think it’s safe to say that he’s never put together a chart of debt levels on the same page as a chart with unemployment or anything else. It’s almost as if being submersed in the myth and misinformation kills off one’s common sense… sigh. Not a bright future to look forward to - he becomes a voting FOMC member soon.

Equities are up sharply overnight in reaction to a sharp decline in the dollar. Below is the overnight action in the DOW and on the right side is the S&P futures that I left in a 30 minute chart:

On the 30 minute chart, you can see that the S&P ran right back up to the 1,101 resistance area which if it isn’t exceeded will form a perfect right shoulder of a H&S topping pattern. If the top of the head is exceeded then the pattern is invalidated.

The dollar took a tremendous .75% plunge overnight and over the weekend. Moves of that size are a sign of severe stress and instability, bordering on getting out of hand. Bonds are down, oil is up, and gold rocketed to another new high, this time peaking at $1,167 an ounce, a stone’s throw from the $1,200 mark. Remember how high it sounded when gold was at $600 an ounce? Well, this move looks like it’s a little bit parabolic now, it’s very overbought and likely to take a rest soon, but it has been crawling along the upper boundary of an expanding wedge and still is.

Three busy days for data prior to the holiday, of course markets will be closed on Thursday and Friday. Today is the slowest of the three, with existing home sales coming out at 10 Eastern. Tomorrow is revised GDP for the 3rd quarter, consumer confidence and a myriad of others. Wednesday is durable goods, jobless claims, consumer sentiment and new home sales.

On Friday we had a very small movement on the McClelland Oscillator which meant that there’s a large move coming, and it looks like we got that in the form of this run up. SPX 1,101 is an area of resistance, then there’s a pivot at 1,107, the prior high at 1,113, and then another pivot at 1,133. The support pivot is at 1,090, the H&S neckline at 1,086.

Also on Friday, there was a spike downward in the VIX. I don’t ignore these spikes as the odds of it following down the tail of the spike seem to be very high, and it looks like this time may be no exception with prices rising again here, chart below:

I really don’t have a lot to add technically otherwise as not a lot has changed… we’re still either in the final wave up, or we’ve topped and this is the start of wave 1 down, those are the two scenarios in play right now and we won’t really know which until we either make a new high or exceed the prior low. Of course the technicals are still screaming TOP is either in or at hand.

Going out into the realm of Fibonacci spirals, a world that will seem “moonbattish” to most, some may remember a post from a person who is running spiral time series and came up with some turn dates for the remainder of the year. He said that his time series showed the following: “The 25th (“F25”) Fibonacci Spiral Calendar sequence gives you the four dates explained in the above Excel chart in 2009; July 11, 2009 (significant low), October 16, 2009 (final highest high in the crash year), November 23, 2009 (secondary high before a crash) and December 10, 2009 (crash).”

His first date was direct hit, his second date is what I am calling an “internal high” and is the still within a day of the actual high in the RUT and XLF, and here we are today to what he calls a “secondary high before a crash” which would imply that we begin a descent and then accelerate downward the second week of December, counter to the usual positive bias in December (btw, the week of Thanksgiving has a strong historical bullish bias). No, I don’t know much about his background or his track record, I’m just bringing it up because I do believe there’s basis in Fibonacci time sequences, I brought it up before, and it seems to be tracking pretty accurately so far.

I found a very interesting chart over the weekend in which it shows the diminishing effects of each new dollar of debt. This is really another way of showing how velocity comes to a stand still as you force more and more debt into the system (dollars in our system are debt). This study concluded that at trend by the year 2015, only five years away, that each new dollar of debt will have ZERO effect on raising GDP and that it already is so bad that $1 of debt only adds about 18 cents onto the output of goods and services in this country!

That’s a pretty amazing thing, and it shows graphically exactly what I’ve been talking about. Debt saturation leads to a stand still in velocity as new money can only service prior debts, thus infusing more debt onto debt eventually has NO positive effect whatsoever on the economy. You see that in the parabolic charts of debt. Well, all parabolic curves collapse, the curve of debt will be no exception. Keep in mind what that means! Our money is debt! When that curve rolls over, it will signal a crash in our money as well… and in fact, the debt and money supply charts are already beginning to roll. This is a system that was flawed via its design, the feature of our money that is causing it is NOT the “fiat” feature (fiat means by decree, thus all money used by governments would be fiat, or by decree), it is the interest bearing debt backed feature that guarantees its eventual demise and the math is saying that for this dollar, it is in the end phase.

In fact, AZRainman did a great picture this weekend showing what’s coming to Wall Street in the second wave:

LOL, AZ does great artwork, and he knows what’s coming (link to his site in blog favorites)!

And my favorite chart from the weekend is someone’s diagram showing the inner workings of the 64% B wave rally:

Now that looks about right to me, might be a little too high a cut for “reality” though, lol. Hey, all this debt, it’s got the dollar under pressure!

Yesterday a person on another forum kept hounding me to accept his beliefs about the way money works. He is backing a person who is running for President(!) because he thinks he has all the answers as to how money works. According to him, government rules are different than other people’s rules when it comes to money and he explains how the Treasury moves deficits around in various accounts and that the net effect is that deficits don’t matter and that we can simply print our way to prosperity, and that the people who are harping about the deficits are the ones who do not understand how money works. This is very reminiscent of the video where Jan questions the politician about interest and deficits and the Haaarvard trained politician tells Jan that he’s full of it and then threatens to throw him out the window! Remember that?

Okay, here is the paper that backs this latest person’s assertions. Just see how many fallacies you can find in the assumptions that are made in it:

This entire paper and way of thinking is just plain old flawed and does NOT represent how the real world works. This is my response to the poster and my attempt to explain how the real world of money works. I hope that it helps to clear up some misunderstandings…

Reply to the poster:

Sorry, not meant as anything personal because MYTHS about money abound. You are incorrect in saying that the government pays you (or anyone) with real money. In fact almost NO REAL MONEY is issued today America or in the entire world.

The government takes in revenue from taxes, that's called income. Then they spend money, that's called outflow. When the outflow exceeds the income, that's called a deficit. When the deficit portion is paid out, the money has to come from somewhere, or alternatively it could just be paid and the deficit not increased, THAT is called printing. In fact, printing in that method would be a REAL dollar, one that came into existence without debt. But that's NOT how our system works and there's a reason for that. To cover the deficit, the Treasury issues bonds, i.e. DEBT. Who generally buys the debt? The BANKS. Thus, the deficits are borrowed from the BANKS, the money is NOT simply printed, or I should say that under the current system, is not supposed to be.

This is not altruistic! The banks charge and receive interest. The interest payments must come from somewhere, and if the money is not there in the form of income, then it is added to the national debt. Thus, all money is supposed to be debt under the current system. And actually the debt COULD work as a money quantity limiting device, but it doesn't work that way... why? Because, debt backs all money, the interest quickly erodes it over time. To cover the interest, more debt must be issued. This is why never ending growth is a must under a debt backed system. More money equals more debt. That's why you are seeing politicians and bankers clamor for ever increasing amount of "CREDIT" i.e. DEBT. Without more and more, the system will deflate and that, in their delusional minds, is bad. This is WHY you see the delusional game of fighting a DEBT PROBLEM WITH MORE DEBT. So, the debts grow and grow and grow until they go parabolic. All exponential growth curves eventually fail, our debts are no exception. Why?

Because our system is OPEN, capital and manufacturing is free to leave... and leave it has. This is terrific at arbitraging wages and keeping inflation temporarily at bay. The problem with that theory is that without wages rising at the same rate as DEBT, the debt can no longer be serviced once saturation occurs. That is where we are today.

And that leads us back to printing without debt. That is essentially what quantitative easing is. Outright printing YES is possible and yes, you could call those dollars REAL, not credit dollars. The problem is then, that you no longer have any method of CONTROL over the quantity of money.

As the quantity of money goes out of control - and it has - some bad things begin to happen. People begin to expect that more printing will occur. The people who hold our debts begin to realize that they are being paid back with diluted money that is worth less. The value of our currency begins to sink in relation to other currencies as we begin to be PUNISHED by free market forces. That may not seem like it's happening, but it is and it's gathering momentum.

The politicians and the economic mass psychosis crowd who believe that deficits on the national level just don't matter are delusional, and they will be proven so in the fullness of time. ALL DEBTS GET REPAID WITH INTEREST IN ONE WAY OR ANOTHER. I would go so far as to call that a law of nature. There are two ways to pay back debt, default or pay it back. When a nation that has debts prints money, it is in fact defaulting to those it owes. Any nation that does too much of this will begin to be squeezed off by the rest of the world. Is there any truth to what I'm saying here? Can you see it?

Another part of the delusion is the fact that the U.S. is "the reserve currency." BULL. There is no law anointing us as such, that status is a PRIVILEGE, one that can and is being lost because of bad stewardship.

If you work for the government and think that your paycheck is just printed out of thin air, you are most certainly incorrect. If everything were that easy, then the markets would not have collapsed last year. Imports would not have crashed more than 20%, etc. MONEY IS AN INTERNATIONAL GAME OF CONFIDENCE.

And we haven't even addressed debt saturation on the individual level, the state and local government level, and the debt saturation that now has the world's banks hobbled. HOW DO YOU GET FROM DEBT SATURATION BACK TO SOUND MONEY WITHOUT LOSING THE CONFIDENCE OF THE REST OF THE WORLD AND WITHOUT CRASHING THE ENTIRE PLANET'S ECONOMY?

There are four major markets and all four markets are intertwined. EQUITIES, BONDS (DEBT), CURRENCIES, AND COMMODITIES. You will see stress seep out from one and bleed into the other. When I say that all debts get repaid with interest in one way or the other... The LEAST painful way to pay back debt is to work and to receive money from your PRODUCTIVE EFFORTS and to pay it back per contract and the rule of law. Another way to pay back debt is to monetize it (this is currently outside of the rule of law). But then when we do monetize, what effect does that have on currencies and commodities? That's where you get to really pay it back, see? The currency goes down, commodities go up and THINGS cost you more. The cost you more is actually you, once again, having to go to work and use your PRODUCTIVE EFFORTS to pay back the debt. THIS IS A LAW, LIKE GRAVITY, YOU CANNOT GET AROUND IT. Oh, you may think you can for awhile, but that is not real, that is delusion.

You can default on your national debt, but again, what effect does that have on your currency? Thus, again, you eventually wind up paying it back, with interest as your money will no longer be taken overseas when you do so, or if they even believe you are going to do so. That’s a loss of confidence, that IS occurring right now.

Thus, our system has set us up for never ending growth, it must happen because of the way the system works. The bankers are the ones who profit from such a system and as the debts build, the people are the ones who pay it back. It's a perfect system for the ones who started it.

Let me ask you a few questions to get you thinking... Why do you think the Primary Dealers MUST buy the Treasury's debts if no one else will? Who made that rule?

How did the IMF become the world's third largest holder of gold?

PEOPLE, please take the time to understand how money works and do not be fooled by politicians or central bankers – they have become ONE IN THE SAME.

So, to get back to the poster’s comments and his backing of the candidate who says it's all a game that can simply be bypassed, I say again, that's NOT the way the real world works.

Now, I know that people are going to attack me and say that it is I who does not understand how money works. I say that over time the markets are going to dispel all such bull____. Thus a window of opportunity is opening. The central bankers think that it is their window of opportunity and they are going to fiercely attack and spread more of their psychopathic and controlling myths in order to get their objective... What's their objective? World wide never ending debt backed growth. Believe it or don't believe it, I don't care, but that's where it's all headed.

You need only look at what happened in Iceland. Debt and derivative saturation to the MAX. The IMF (the world’s central bankers) came in and offered loans (DEBT) under condition. Those conditions would effectively turn over CONTROL of the nation and how it’s money system work to the IMF (central bankers). Where does the IMF get the money to lend in the first place? Where are their productive efforts to create the money they lend?

The President of Iceland said NO, pound sand! The next day the people were rioting in the streets protesting the fact that the President would not take the loans! The IMF (central bankers) has the world by the balls. If you don’t play their debt backed games, they will isolate your country and cut you off from the rest of the world. But the truth is that Iceland deserved to be cut off from the rest of the world and they were rightly being punished because they allowed themselves to run up an impossible level of debt, thus they gave up control of their own destiny a long time ago. That’s what we are doing today as well… we are doing it as a nation, in our states, in our local governments, and as individuals.

FREEDOM only comes when one is free from debt! Like all things in life, there is a balance. We have gotten very obviously out of balance, something that was UNAVOIDABLE because of the interest bearing debt backed feature of our current money system that is only 38 years old. On the national level, it is possible to have a non debt backed money system whereby money is spent into being in the form of real money, not credit money. The problem then, is one of quantity and control.

Thus, I look at coming events (and EVENTS ARE COMING) not with fearful eyes, but with OPTIMISTIC eyes, as I view coming events as a window of OPPORTUNITY to change the way our monetary systems work... WE DO NOT NEED CENTRAL BANKERS IN ORDER TO HAVE A MONETARY SYSTEM THAT WORKS! Indeed, our money does NOT have to be backed by debt, but for that to happen, you MUST control the quantity or the forces of nature will eventually control it for you. That is, trade is a game of CONFIDENCE. The way that capital forms is by having confidence. The way that confidence is held over time is by having and following the rule of law and by controlling the QUANTITY OF MONEY.